Currently, there is a shortfall of
4,000 MW in the demand and supply of electricity in the country and the
government is expected to add about 1300 MW over next few years through the
private sectors in order to promote sustained industrial growth and benefit the
growing national economy.

Presently, the share of energy
consumption in the country is 23% residential, 34% industrial, 34%
transportation, 3 % commercial, 3% agriculture, and 3 % government offices.

Electricity has become the most
important utility in this era. Electricity consumption is increasing day by day
due to change in life styles and introduction of technology. The current energy
consumption trends in the country are extremely inefficient, be it in domestic,
industrial, trade or commercial sectors.

ELECTRICITY IS PRODUCED THROUGH NATURAL
RESOURCES.

Different countries have different
natural resources and accordingly the wealth of electricity. Western countries
have very useful planning for generating electricity. The per capita consumption
of energy in different countries are (kwh): USA 11879, Japan 6190, Singapore
4699, Malaysia 1190, Iran 768, Thailand 678, Pakistan 342 etc.

At present the total power production
capacity in Pakistan is about 19,500 MW from different sources i.e. hydel,
thermal, coal, nuclear etc. The break-up is WAPADA 11,327MW (50%), KESC 1,756 MW
(11%), PAEC 462 (3%) MW, and IPPs 5,977 MW (36%). 5,000 MW (about 26%) is the
capacity of hydropower while the rest 14,522 MW is thermal.

Between 1985 and 2005, Pakistan's total
installed power generating capacity increased nearly fourfold i.e. from 5229 MW
to 19,522 MW and between 1991 and 2007, total consumption increased by more than
84% i.e. from 31TWh to 57 TWh.

Pakistan has significant oil, gas,
coal, mineral ore deposits as well as alternate solar and wind potentials. The
country has oil reserves of over 310 million barrels as of January 2008, and gas
reserves of 750 BCM. The oil and gas are the two major components of energy
resources.

Due to its ideal geographic location,
Pakistan possesses immense potential to harness unlimited solar and wind energy.
During the last two decades Pakistan has developed its potential in photovoltaic
(PV) technology, which is suitable for small power requirements. There is a
possibility to add 500 MW power through alternate energy resources in the next
few years.

The majority of oil comes from reserves
located in the southern half of the country. Gas production during the last five
years has risen by 65% to over 3.8 BCF/day. The country's two gas distribution
companies in north SNGPL and in south SSGPL have invested over 200 million US
dollars a year to increase the capacity of the existing distribution network of
80,000 kilometers.

However, still only 20% of the
population has access to natural gas. Natural gas is found whenever oil and gas
occur together. Natural gas largely contains 80% methane gas along with small
quantities of ethane, propane, butane and also carbon dioxide, N and
occasionally helium.

Gas is a prime source of energy in
Pakistan as it provides 65% of the natural energy requirements. The share of gas
in fuelling the economy is followed by oil which provides 29.4%. The other minor
sources are hydropower providing 12%, coal 5%, and nuclear only 1.2 %.

Gas is the prime mover of Pakistan's
economy. Natural gas is piped from gas wells for use as fuels in homes,
industries, institution, and thermal electric power stations in the different
parts of the country. The biggest consumer of gas is the power sector which uses
it for generating electricity throughout the country.

Nearly 50% of the gas fuels are used in
the power sector. Industry uses another 20%. The next big consumer is the
fertilizer industry which uses 16% as feed stock for producing urea. The
domestic consumption is only 18% followed by commercial use of 2% and CNG for
cars amounts 5%.

There are 173 gas fields in the
country, of them 140 are located in Sindh, 22 in Punjab, 7 in Balochistan and 4
in NWFP. Our current gas total resource potential is 32 TCFT. Pakistan has
13,000 km of gas transmission lines and 85,000 kilometers of gas distribution
lines.

Gas domestic consumers are 3.8 million
and gas commercial consumers are 70,000. However, still only 18% of the
population has access to natural gas. Gas production has been increasing at a
steady rate of 10% annum. In fact, Pakistan has the best integrated gas supply
system amongst the developing countries of the world.

Pakistan is the world's third and
Asia's largest consumer of CNG in the transportation industry. The commercial
requirement of energy in the country has doubled over the last decades, with the
demand for natural gas growing at 10% per annum. However, gas discoveries and
supply are not keeping pace with the increasing demand and the requirement for
imported gas has become inevitable with the expected shortfall of 700 mmcf/day
by 2010.

Pakistan is also emerging as the
preferred transit route for energy in the region, due to its ideal geographical
location at the crossroads of Central Asia and the Arabian Sea. Total oil
resource potential is 27 billion barrels. With crude oil refining capacity 11.28
million tons per year.

The locally refined outputs are 8.7
million tons per year. Total consumption of oil is 20 million tons per year. The
current production of crude oil in Pakistan is about 68,200 barrels per day.

Today, about 40% of energy needs of the
world including USA and Western Europe are met through coal. Thar coal field in
Sindh province has huge deposit of 184 billion tons of coal and quality of its
coal is superior. Coal is a better substitute fuel for the generation of
electricity. Coal is a major source of electricity in the world and some of the
country used coal in significant amount for electricity production and these
countries are (in %): Germany 47, USA 50, Greece 58, Czech Rep 59, India 69,
Morocco 59, Kazakhstan 70, Israel 71, China 78, Australia 80, Poland 93, and S.
Africa 93.

In Pakistan, the share of coal in the
energy mix is about 5% and in power generation even less than 1% despite the
fact that Pakistan ranks among those countries which posses vast deposits of
coal.